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Rite Aid's Debt Load to Increase with Revco Purchase.(Originated from The Patriot-News, Harrisburg, Pa.)
Knight Ridder/Tribune Business News, December, 1995 by DeKok, David; Warner, Mary
Dec. 3--Rite Aid Corp. should not be hurt by taking on $2.5 billion in debt to finance its purchase of Revco D.S. Inc., says Martin Grass, Rite Aid's chairman and chief executive officer.
But some analysts are concerned that East Pennsboro Twp.-based Rite Aid may have bitten off more than it can chew.
Standard & Poor's, a bond-rating agency, downgraded the company's debt rating after last week's acquisition announcement. Moody's Investors Service,
another rating agency, said it was considering a downgrade. The size of the deal will push Rite Aid's debt as a percent of total capital from 48 percent to 59.6 percent.
"We're still investment grade," Grass said Friday during an interview. "We're not a junk-bond credit or highly-leveraged LBO...
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